THE RESORT REDEFINING MULTIFAMILY INVESTMENTS (513) 878-7750
ADGMultifamily.com
CONFIDENTIALITY & DISCLAIMER The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property, please promptly return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence of absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT ANDREWS | DICKMAN FOR MORE DETAILS.
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PRESENTED BY
TIM VANWINGERDEN
Associate 513-878-7750 tim.vanwingerden@marcusmillichap.com
JORDAN DICKMAN
First Vice President of Investments 513-878-7735 jordan.dickman@marcusmillichap.com
NICK ANDREWS
First Vice President of Investments 513-878-7735 nick.andrews@marcusmillichap.com
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the table of
CONTENTS
1 2
the ASSET | 8 executive summary..........................................10
property snapshot............................................12 the amenities...................................................14
the COMPE TITIVE SE T | 16
rent matrix........................................................ 18
rent sort........................................................... 20 the villages at lake reba.................................. 22 the avenue...................................................... 24
3 4
riverford crossing............................................. 26
the PERSPECTIVE | 28 unit mix........................................................... 30
financial breakdown....................................... 32
the MARKET | 34 market highlight.............................................. 36
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CALABASAS, CALIFORNIA | HQ
80+ | OFFICES
2,500 | EMPLOYEES
UNRIVALED SUCCESS IN THE MIDWEST Nick Andrews
First Vice President Investments Director, NMHG
Jordan Dickman
First Vice President Investments Director, NMHG
INVESTMENT ADVISORS
Austin Sum Investment Associate
Garry Schloemer Investment Associate
JD Schmerge Investment Associate
Brian Johnston
Tim VanWingerden
Investment Associate
Investment Associate
DEBT & STRUCTURED FINANCE
Chris Litzler Senior Director MMCC
Jim Leonard
Senior Managing Director of Capital Markets MMCC
Alec Neesham Associate Director MMCC
CLIENT RELATIONS
VALUATION & RESEARCH
Derek Maddy
Jennifer Bauer
Financial & Research Analyst
Client Relationship Coordinator
OPERATIONS & MARKETING
Brittany Campbell-Koch Director of Operations
Josh Caruana
Vice President Regional Manager Indianapolis | Cincinnati | Louisville St Louis | Kansas City
Kristin Smith Alex Papa Marketing
Marketing
John Sebree
Sidney Bills
Office Administrator
Senior Vice President National Director National Multi Housing Group
Liz Popp
Midwest Operations Manager
Michael Glass
Senior Vice President Midwest Division Manager National Director, Manufactured Home Communities Group
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01
the ASSET
10 - executive summary 12 - property snapshot 14 - the amenities
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EXECUTIVE SUMMARY
THE RESORT
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INVESTMENT HIGHLIGHTS
EXECUTIVE SUMMARY
• Marcus & Millichap is pleased to present The Resort, a 264-unit apartment complex located in Richmond, KY just outside of Lake Reba, a popular outdoor spot for locals and tourists alike. Picturesque views and ample parking highlight The Resort which has taken the extra step by installing geothermal HVAC, high-speed internet access, and engineered hardwood in all 264 units.
BUY AND HOLD • Favorable debt markets provide strong cash-on-cash return opportunity for a great buy and hold play in a desirable submarket.
LIMITED SUPPLY | HIGH DEMAND ASSET • Properties of this size do not trade often in this market. In the last 10 years, there has only been one deal over 200 units that has traded in Richmond.
MARKET PROVEN RENTS • The competitive set boasts rents $300-500 higher than The Resort allowing the opportunity to draft newer construction and other similar product with a rent push.
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GARDENS AT KNOXWOOD
PROPERTY SNAPSHOT 743 Benson Drive Richmond, KY
2014
264 17 2 IN UNIT 2:01 TENANT PAYS: electric 12
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YEAR BUILT
NUMBER OF UNITS
NUMBER OF BUILDINGS
NUMBER OF STORIES
LAUNDRY
PARKING RATIO
CONCRETE WOOD BRICK COPPER ELECTRIC GEOTHERMAL
FOUNDATION
FRAMING
EXTERIOR
WIRING
HOT WATER
HVAC
OWNER PAYS: trash, water, sewer, gas, cable, internet
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THE RESORT
AMENITIES UNIT AMENITIES
COMMON AMENITIES
• Engineered Hardwood
• Fitness Center
• Vaulted Ceilings*
• Picturesque Views
• Ceramic Tile
• Pool
• Stainless Appliances
• On-site Management
• Balcony/Patio
• Clubhouse
• Faux Blinds
• Playground Park
• W/D Included
• Garage Parking Available
• Dishwasher
• Picnic / Grill Area
• Geothermal Heating and Cooling • Fiber Optic Internet • Outdoor Storage • Ceiling Fans *2nd Floor Units
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02
the COMPETITIVE SET
18 20 22 24 26
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- rent matrix - rent sort - skylark manor - sunset rill - riverview
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COMPETITIVE SET
RENT MATRIX
Average rents and square footage of 1- and 2-bedroom units within the competitive set.
As over 50% of Lexington’s workforce commutes from outside of the city, the Richmond submarket is comparable to other markets outside Lexington, attracting tenants looking for more space and affordability in rents. The competitive set compares the surrounding markets outside Lexington to The Resort. Currently, there is over a $500 affordability gap between The Resort and the Lexington market allowing a $100 rental increase to draft rents from the Lexington market.
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THE MILL RIVERFORD CROSSING
WOOLDRIDGE APARTMENTS
THE RESORT THE AVENUE
THE VILLAGES AT LAKE REBA
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COMPETITIVE SET
RENT SORT One Bedroom Apartment Rents Sorted by Net Rent Property
Year Built
City
SF
Market Rent
Utility Adjustment/Month
Net Rent
Net Rent/SF
Greyson on 27
2020
Nicholasville
931
$1,150
$0
$1,150
$1.24
The Mill
2012
Georgetown
698
$1,130
$0
$1,130
$1.62
WaterStone at Hamburg
2017
Lexington
780
$1,103
$0
$1,103
$1.41
Riverford Crossing Apartment
2010
Frankfort
750
$1,083
$0
$1,083
$1.44
The Avenue
2015
Nicholasville
779
$1,084
$55
$1,029
$1.32
The Retreat at Hamburg Place
2013
Lexington
760
$997
$0
$997
$1.31
The BLVD at Hays
2015
Lexington
821
$967
$15
$952
$1.16
Amerson Orchard
2017
Georgetown
538
$897
$0
$897
$1.67
The Resort Pro Forma
2014
Richmond
800
$925
$55
$870
$1.09
The Marq
2018
Georgetown
723
$879
$15
$864
$1.20
The Villages at Lake Reba
2021
Richmond
854
$909
$55
$854
$1.00
Wooldridge Apartments
2013
Versailles
767
$805
$0
$805
$1.05
The Resort Avg Effective
2014
Richmond
1000
$804
$55
$749
$0.75
Spring House Village*
2019
Richmond
755
$754
$65
$689
$0.91
East Ridge Apartments
2004
Richmond
900
$600
$0
$600
$0.67
Foxchase Apartments*
2012
Richmond
776
$575
$0
$575
$0.74
Averages
2015
790
$916
$45
$897
$1.16
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Two Bedroom Apartment Rents Sorted by Net Rent Property
Year Built
City
SF
Market Rent
Utility Adjustment/Month
Net Rent
Net Rent/SF
Greyson on 27
2020
Nicholasville
1255
$1,473
$0
$1,473
$1.17
WaterStone at Hamburg
2017
Lexington
1131
$1,395
$0
$1,395
$1.23
The Mill
2012
Georgetown
1043
$1,245
$0
$1,245
$1.19
Riverford Crossing Apartment
2010
Frankfort
1111
$1,218
$0
$1,218
$1.10
The Retreat at Hamburg Place
2013
Lexington
1161
$1,209
$0
$1,209
$1.04
The Avenue
2015
Nicholasville
1070
$1,254
$65
$1,189
$1.11
The BLVD at Hays
2015
Lexington
1160
$1,182
$15
$1,167
$1.01
Amerson Orchard
2017
Georgetown
932
$1,087
$0
$1,087
$1.17
The Marq
2018
Georgetown
1160
$1,084
$15
$1,069
$0.92
The Resort Pro Forma
2014
Richmond
1000
$1,130
$65
$1,065
$1.07
The Villages at Lake Reba
2021
Richmond
1068
$1,111
$65
$1,046
$0.98
Wooldridge Apartments
2013
Versailles
1272
$1,040
$0
$1,040
$0.82
The Resort Avg Effective
2014
Richmond
1000
$930
$65
$865
$0.87
Spring House Village*
2019
Richmond
1087
$880
$65
$815
$0.75
East Ridge Apartments
2004
Richmond
1200
$800
$0
$800
$0.67
Foxchase Apartments*
2012
Richmond
1150
$628
$0
$628
$0.55
Averages
2015
1,113
$1,104
$51
$1,082
$0.98
CEDAR RIDGE
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COMPETITIVE SET
THE VILLAGES AT LAKE REBA
593 Regency Cir, Richmond KY
SUMMARY PROPERTY SUMMARY
96
UNITS
2021
YEAR BUILT
Lease-Up
OCCUPANCY UNIT MIX & RENT SCHEDULE
AMENITIES UNIT FEATURES 24 hour availability
high ceilings
RENT
SF
RENT PER SF
1x1
$909
854
$1.00
2X1
$1,111
1068
$0.98
Comparables Rent Analysis 1 Bed
clubhouse pool
UNIT TYPE
$0-$1,084
LOW
HIGH HIGH 2 Bed
LOW
$0-$1,254 HIGH HIGH
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SUBJECT COMP SUBJECT COMP
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COMPETITIVE SET
THE AVENUE
801 E Brannon Road, Lexington KY SUMMARY PROPERTY SUMMARY UNITS
240
YEAR BUILT
2015
OCCUPANCY
94%
UNIT MIX & RENT SCHEDULE
AMENITIES UNIT FEATURES fitness center pool playground dog park clubhouse business center garage gated community
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storage units
balcony/patio
SF
RENT PER SF
1x1
$1,084
779
$1.32
2x1
$1,254
1070
$1.11
1 Bed
$0-$1,084
LOW
HIGH HIGH
ceiling fans window coverings
RENT
Comparables Rent Analysis
walk-in closets hardwood floors
UNIT TYPE
2 Bed LOW
$0-$1,254 HIGH HIGH
SUBJECT COMP SUBJECT COMP
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COMPETITIVE SET
RIVERFORD CROSSING
8000 John Davis Dr, Frankfort KY
SUMMARY PROPERTY SUMMARY
300
UNITS YEAR BUILT
2010
OCCUPANCY
95%
UNIT MIX & RENT SCHEDULE
AMENITIES UNIT FEATURES pool fitness center clubhouse gated community picnic area
hardwood floors
washer/dryer in unit
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SF
RENT PER SF
1x1
$1,083
750
$1.44
2x1
$1,218
1111
$1.10
1 Bed
$0-$1,084
LOW
HIGH HIGH
yard balcony/patio
RENT
Comparables Rent Analysis
walk-in closets stainless steel appliances
UNIT TYPE
2 Bed LOW
$0-$1,254 HIGH HIGH
SUBJECT COMP SUBJECT COMP
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the PERSPECTIVE 30 32
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- unit mix - financial breakdown
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THE RESORT
THE UNIT MIX PROJECTED
MARKET
AVERAGE EFFECTIVE
Rentable
Total
Units
SF
SF
One Bedroom
121 Units
800 SF
96,800 SF
$804.40
$1.01
$97,332
$850.00
$1.06 SF $102,850
$925.00
$1.16 SF $111,925
Two Bedroom
143 Units
1,000 SF
143,000 SF
$940.73
$0.94
$134,524
$1,005.24
$1.01 SF
$143,750
$1,130.24
$1.13 SF
$161,625
908 SF
239,800 SF
$878.25
$0.97 SF
$231,857
$934.09
$1.03 SF
$246,600
$1,036.17
$1.14 SF
$273,550
Unit Type
Total Rent Rent/Unit Rent/SF
Potential
Total Rent Rent/Unit Rent/SF
Potential
Total Rent Rent/Unit Rent/SF
Potential
Summary
Totals / Wtd. Averages 264 Units
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MARKET
AVERAGE EFFECTIVE Avg. Total Rent
PROJECTED Avg. Total Rent
One Bedroom
No. of
Rentable
Total
Avg.
Unit Type
Units
SF
SF
Rent/Unit
Rent/SF
Potential
Rent/Unit
Rent/SF
Potential
Rent/Unit
Rent/SF
Potential
1x1
121 Units
800 SF
96,800 SF
$804.40
$1.01 SF
$97,332
$850.00
$1.06 SF
$102,850
$925.00
$1.16 SF
$111,925
Totals / Wtd. Averages
121 Units
800 SF
96,800 SF
$804.40
$1.01 SF
$97,332
$850.00
$1.06 SF
$102,850
$925.00
$1.16 SF
$111,925
Two Bedroom
No. of
Rentable
Total
Avg.
Avg.
Total Rent
Avg.
Total Rent
Unit Type
Units
SF
SF
Rent/Unit
Rent/SF
Potential
Rent/Unit
Rent/SF
Potential
Rent/Unit
Rent/SF
Potential
2x1
Total Rent
Total Rent
128 Units
1,000 SF
128,000 SF
$939.84
$0.94 SF
$120,300
$1,000.00
$1.00 SF
$128,000
$1,125.00
$1.13 SF
$144,000
2x2 View
15 Units
1,000 SF
15,000 SF
$948.33
$0.95 SF
$14,225
$1,050.00
$1.05 SF
$15,750
$1,175.00
$1.18 SF
$17,625
Totals / Wtd. Averages
143 Units
1,000 SF
143,000 SF
$940.73
$0.94 SF
$134,524
$1,005.24
$1.01 SF
$143,750
$1,130.24
$1.13 SF
$161,625
AVERAGE EFFECTIVE
MARKET
PROJECTED
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Year 1
(Rent Roll/T# Income; Adjusted Trailing Expenses)
(Recapture LTL, Stabilized Occupancy and Other Income, Normalized Expenses, Start Reno)
GROSS POTENTIAL RENT
INCOME
FINANCIAL BREAKDOWN &
% of GPR
All Units at Market Rent
$2,959,200
Gain (Loss) to Lease
($177,600)
GROSS SCHEDULED RENT
$2,781,600
6.00%
Per Unit
% of GPR
11,209
$3,282,600
(673)
($131,304)
10,536
$3,151,296
Per Unit 12,434
4.00%
(497) 11,937
Other Income Garage Rent
$19,349
0.70%
73
$21,464
0.68%
81
Late Fees
$5,598
0.20%
21
$6,209
0.20%
24
Application Fee
$2,955
0.11%
11
$3,278
0.10%
12
$0
0.00%
0
$79,200
2.51%
300
$29,655
1.07%
112
$112,096
3.56%
425
10,649
$3,263,392
9.64%
(1,016)
($157,565)
Internet/Cable Fee Total Other Income* GROSS POTENTIAL INCOME
$2,811,255
Physical Vacancy
($268,227)
Bad Debt EFFECTIVE GROSS INCOME
12,361 5.00%
(597)
$0
0.00%
0
($31,513)
1.00%
(119)
$2,543,028
84.36%
9,633
$3,074,314
90.00%
11,645
% of EGI
Per Unit
Non-Controllable
EXPENSES
VALUE ANALYSIS
Current
Real Estate Taxes
% of EGI
Per Unit
$72,843
2.86%
276
$72,843
2.37%
276
Adjustment for Sale
$0
0.00%
0
$166,772
5.42%
632
Total Real Estate Taxes
$72,843
2.86%
276
$239,615
7.79%
908
Insurance
$68,604
2.70%
260
$72,600
2.36%
275
Electric
$21,600
0.85%
82
$22,032
0.72%
83
Water & Sewage
$83,748
3.29%
317
$85,423
2.78%
324
2019 Taxes Paid
Utilities
$7,263
0.29%
28
$7,408
0.24%
28
Total Utilities
Trash Removal
$112,611
4.43%
427
$114,863
3.74%
435
Total Non-Controllable
$254,058
9.99%
962
$439,059
14.28%
1,663
$17,400
0.68%
66
$19,800
0.64%
75
$0
0.00%
0
$9,240
0.30%
35
$17,400
0.68%
66
$29,040
0.94%
110
450
Total Utilities Contract Services Landscaping/Grounds Pest Control Total Contract Services
Repairs & Maintenance
$118,800
Marketing & Promotion
$0
On-Site Payroll General & Administrative
$237,600
Added Added
$2,700
4.67%
450
$118,800
3.86%
0.00%
0
$13,200
0.43%
50
9.34%
900
$250,800
8.16%
950
0.11%
10
$19,800
0.64%
75
4.00%
385
$122,973
4.00%
466
$85,536
3.36%
324
$85,536
2.78%
324
$67,320
2.65%
255
$68,666
2.23%
260
Total Controllable
$631,077
24.82%
2,390
$708,815
23.06%
2,685
TOTAL EXPENSES
$885,135
34.81%
3,353
$1,135,893
36.95%
4,303
NET OPERATING INCOME
$1,657,893
65.19%
6,280
$1,938,421
63.05%
7,343
Management Fee
$101,721
Telephone & Cable Replacement & Reserves
Added
Year 2 (...Stabilized Occupancy, Finish Reno on Remaining Units) % of GPR $3,381,078 ($67,622)
Per Unit 12,807
2.00%
$3,313,456
(256) 12,551
$22,107
0.67%
84
$6,396
0.19%
24
$3,376
0.10%
13
$81,576
2.46%
309
$115,459
3.48%
437
$3,428,915 ($165,673)
12,988 5.00%
(628)
($33,135)
1.00%
(126)
$3,230,108
92.00%
12,235
% of EGI
Per Unit
$72,843
2.26%
276
$166,772
5.16%
632
$239,615
7.42%
908
$74,052
2.29%
281
$22,473
0.70%
85
$87,131
2.70%
330
$7,556
0.23%
29
$117,160
3.63%
444
$442,808
13.71%
1,677
$20,196
0.63%
77
$9,425
0.29%
36
$29,621
0.92%
112
$121,176
3.75%
459
$13,464
0.42%
51
$255,816
7.92%
969
$20,196
0.63%
77
$129,204
4.00%
489
$87,247
2.70%
330
$70,040
2.17%
265
$726,764
22.50%
2,753
$1,157,591
35.84%
4,385
$2,072,517
64.16%
7,850
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the MARKET
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- local market highlight
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LOCAL MARKET HIGHLIGHTS
RICHMOND, KY
Population Median Age Median Household Income
1 Mile
(2020) # of Houses Median Home Value
3 Miles
Population Median Age Median Household Income (2020) # of Houses Median Home Value
5 Miles
Population Median Age Median Household Income (2020) # of Houses Median Home Value
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3,966 37 $48,585 1,662 $129,239 28,938 34 $42,240 10,785 $147,997 45,769 35 $46,735 17,787 $162,633
3 Mile 1 Mile
5 Mile
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LOCAL MARKET HIGHLIGHTS
RICHMOND, KY Richmond is the county seat of Madison County, one of the fastest growing communities in Kentucky. Richmond is the third-largest city in the Bluegrass Region and the sixth-largest city in the state. Richmond is the principal city of the Richmond–Berea Micropolitan Statistical Area, which includes all of Madison and Rockcastle counties. The city is named after Richmond, Virginia, and is the home of Eastern Kentucky University (EKU), which has a student population of approximately 16,000 and over 2 2,000 staff. The majority of the city’s high rises are located on the campus of EKU, which include the 20-story Commonwealth Hall, which is the tallest building in Richmond, the 16-story Keene Hall, and the 13-story Telford Hall. The 2,000-seat EKU Center for the Arts was completed in 2011. Richmond serves as the center for work and shopping for south-central Kentucky. Richmond boasts a regional shopping center, theaters, live entertainment, cultural activities, fine dining, and many areas of scenic and historic interest. The city also has numerous parks, the most prominent being Lake Reba Recreational Complex, which attracts tourist from all over central Kentucky.
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LAKE REBA
DOWNTOWN RICHMOND
RICHMOND CENTER
Our commitment is to help our clients create and preserve wealth by providing them with the best real estate investment sales, financing, research and advisory services available
www.adgmultifamily.com 513-878-7795